The two biggest American oil firms, Exxon Mobil and Chevron, reported strong earnings growth on Friday, despite low oil prices. In the first three months of the year, Exxon made $11.4 billion in profit, which is an 11% decrease from the final quarter of 2022. Rival Chevron posted earnings of $6.6 billion, primarily due to its profitable fuel sales division. Chevron’s performance beat analysts’ forecast by 4.4%. Exxon, on the other hand, was anticipated to hit profits of $10.3 billion. Compared to the same quarter the previous year, Chevron’s net income increased marginally by 5%. Profits were also significantly higher than their quarterly average over the previous ten years.
Kathy Mikells, Exxon’s chief financial officer, stated,
“It was a record first quarter coming after a record year and that’s despite the fact that energy prices came down.”
The strong results coincide with recent drops in the price of petroleum and natural gas. The drop in oil prices is attributed to fears of central banks taking measures to tame inflation.
Do Chevron, Exxon expect oil prices to pick up steam this year?
Brent Crude, the global price standard, is currently trading at about $78 per barrel, much below the highs of the previous year. The price of oil is roughly where it was earlier this month when Opec+ surprised the market with a production cut to sustain prices.
The second half of the year should see an improvement in the oil markets, according to Chevron’s chief financial officer, Pierre Breber. He attributed the rise to China’s economic rebound pushing crude demand higher while supply remains tight.
Exxon announced on Thursday that it has finalized its investment decision to proceed with the massive $12.7 billion Uaru oil project in the deep waters off Guyana. Up to 250,000 barrels of oil and gas will be pumped every day as a result of the project.
The businesses are nevertheless more lucrative than they have been in years. This is despite the slowdown in the energy markets. One reason is that companies are keeping a tight rein on their spending. Additionally, companies have rewarded investors by increasing dividends and share repurchases.